Demise of China’s ‘model’ village, where cash and communism collide

Demise of China’s ‘model’ village, where cash and communism collide

HUAXI: It was a gilt-edged gift to Communist propaganda: a village led by a Party visionary who transformed farmers into millionaires while tacking close to China's collectivist ideals. But Huaxi's success story has soured, sunk by a pernicious brew of nepotism and political patronage which experts say may hold wider lessons for the pitfalls of "capitalism with Chinese characteristics“ in a country where power emanates from the Communist Party.

Village chief Wu Renbao transformed Huaxi, a few hours from Shanghai, from a rural backwater into a wealthy collective, surfing China's economic reforms for over four decades as the impoverished nation remade itself into a superpower. From textiles to steel and real estate, Wu established the "Huaxi Group“, a village conglomerate of over one hundred companies. Those minted great wealth and won the village leadership praise for a pioneering approach of returning profits back to residents of China's self-styled "richest village“ via beefy dividends.

By 2004, the average annual income of villagers had reportedly reached over 122,000 yuan ($19,000) “” forty times that of most farmers “” as Huaxi's status as a winner in China's Party-driven march from poverty gleamed back in rows of villas, garish hotels, overseas degrees and generous social welfare